§ John MannTo ask the Chancellor of the Exchequer whether he expects to meet his target of having achieved a modest surplus across the current economic cycle ending in fiscal year 2005–06. [171292]
§ Ruth KellyThe UK public finances are underpinned by two fiscal rules: the sustainable investment rule and the golden rule. The golden rule states that over the economic cycle, the Government will borrow only to invest and not to fund current spending. Progress against the rule is measured by the average annual surplus on the current budget measured as a ratio to GDP over the economic cycle.
The average surplus on the current budget between 1999–2000, which is the Government's provisional judgment of the start of the current cycle, and 2005–06 when the Government project the economy will return to trend, as stated in the Budget 2004 (HC 301), table 2.6 page 34, is 0.1 per cent. of GDP. On this basis, the Government are on track to meet the golden rule.